Prepared by Pheng Khna, Siv VutthyBuild Bright University 1 Planning I-foundation of planning 1-What is Planning?  Planning: “Thinking before Doing”  Planning: “What is to be done” and “How is to be done” Chapter2:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 2 Planning can be defined in term of : 1.Formal Planning:  Setting specific objectives or goals.  Covering period of time.  writing down.  and sharing of objectives to organizational members (subordinates). 2.Informal Planning:  Nothing writing down.  No sharing of objectives to the subordinate in organization.  No timing

Prepared by Pheng Khna, Siv VutthyBuild Bright University 3 2-Purpose of planning All managers should engages in planning, because, planning can : Give direction Reduce the impact of changes Minimize waste Set standard to participate control 3-Type of planning A-In terms of scope of activities Strategic plan:  Tactical plan:  Operational plan:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 4 B-In terms of time frame  Long term plan:  Short term plan:  Intermediate plan: C-In terms of time frame  Specific plan:  Directional plan:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 5 4-Approachs to planning  Top down planning:  Bottom up planning:  Inside out planning:  Outside in planning:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 6 II-Major planning tools  Budgets:  Schedules:  Standard:  Policies:  Procedures:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 7 1-What is strategic Planning It is the determining what organization’s long term goals should be for the next 1-10 years with resources they expect to have available. 2-Strategic Business Planning It is the documentation that preparing by carefully including four step as bellow:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 8 Vision, mission, objectives/ goals Internal analysis (Strong and weakness External analysis (Opportunity and Threats SWOT analysis and Create Strategy Implementation Evaluation

Prepared by Pheng Khna, Siv VutthyBuild Bright University 9 A-Vision It is the determining what organization’s long term goals should be for the next 1-10 years with resources they expect to have available. Build Bright University will be one of the leading and internationally recognized universities in the region. B-Purpose  Who we are ?  What we do ?  Whom our customers are ? or For whom do we do it ? Example:  BBU:  Motorola:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 10 3-Environment Analysis A. External Factors  Economy:  Society/Culture:  Technology:  Competition:  Labor Supply: B. Internal Factors  Human Resources:  Product and Services:  Finance:  Equipment/Technology:  Policy:  Culture:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 11  SMART goals S pecific M easurable A ttainable R esult T ime  SWOT analysis It is a comparison of Strengths, Weakness, Opportunities, and Threats that help executives formulate strategy.

Prepared by Pheng Khna, Siv VutthyBuild Bright University 12 Internal Assessment of the Organization External Assessment of the Environment What are our weaknesses ? Outdate facilities Inadequate R&D Obsolete technology Weak planning failures What are our threats ? New competitions New regulations Changing market tastes Substitute products Shortage of resources What are our strengths ? Manufacturing efficiency Skill workforce Good market share Strong financing Superior reputation What are our opportunities ? Possible new markets Strong economy Weak rivals Emerging technologies Growth of existing market SWOT Analysis

Prepared by Pheng Khna, Siv VutthyBuild Bright University Developing Strategy 1.Marketing strategy: developing marketing objectives are base on the situation analysis. Conduct market segmentation. Select target market and measure market demand. Create strategic marketing mix. Determine sales forecasting.

Prepared by Pheng Khna, Siv VutthyBuild Bright University 14 2.Product strategy:  Select Location Accessorily to transportation. Closeness to the market. Availability of labor, raw material. Cost factors (land, construction, materials, labor…) Quality of location services (policy, banking, insurances…) Local regulation Other utilities (water supply, power, sewer…)

Prepared by Pheng Khna, Siv VutthyBuild Bright University 15  Layout building office equipment and environment workflow systems  Designing production/Operation process It is flow line of production or services. example: InputOutput Raw materialProducts or CustomerServices Material Labor 1234 Work Station

Prepared by Pheng Khna, Siv VutthyBuild Bright University 16  Planning Inventory  right goods in the right quantity at the right time and place. Example: JIT method  Quality Control  meet certain standards.  Forecasting production  using past and current information to predict future production. Production requirements=PS+DEI-BI 2050 units =

Prepared by Pheng Khna, Siv VutthyBuild Bright University 17 3-Organizational Strategy  Deciding on a legal form of the organization  Sole Proprietorship  Partnership  Corporation  Staffing  What types of employees are needed?  How many employees are needed?  How should employees be recruited and trained?  How should employees be compensated and motivated?

Prepared by Pheng Khna, Siv VutthyBuild Bright University 18 4-Financial Projection  Pro forma income statement:  Pro forma balance sheet:  Cash Budget: Break event point:

Prepared by Pheng Khna, Siv VutthyBuild Bright University 19 Fixed Cost Variable Cost Volume of output Profit area Revenue Loss area Break-even point TC=TS P x Qo=FC+VC P x Qo=FC+V x Qo P x Qo-V x Qo=FC Qo(P-V)=FC Qo=FC/(P-V) QoQo Q 0

Prepared by Pheng Khna, Siv VutthyBuild Bright University 20 III-decision making 1.What is decision making? It is the process of identifying problems and opportunities and resolving them. 2.types of managerial decision making A-Programmed Vs Non-programmed decision making  Programmed decision: The process of identifying a problem and matching the problem with established routines and procedures for resolving it.  Non-program decision: The process of identifying a problem when a situation is unique and there are not previously established routines or procedures that can be used as guides.

Prepared by Pheng Khna, Siv VutthyBuild Bright University 21 B-Proactive Vs Reactive decisions  Proactive decision: a decision made in participation of an external change or other conditions.  Reactive decision: the decision made in response to external changes. C-Intuitive Vs Systematic decisions  Intuitive decision: a process of estimating or guessing to decide among alternatives.  Systematic decision: an organized, exacting, data driven process for choosing among alternatives.

Prepared by Pheng Khna, Siv VutthyBuild Bright University 22 3.Decision making process Step1 Find and defined the source of problem Step2 Generate and valuate alternative solution Step3 Select preferred solution Step4 Implement the solution and monitoring Recycle process as necessary

Prepared by Pheng Khna, Siv VutthyBuild Bright University 23 Step1: Identify the problem  Scan environment and emergence of potential problem.  Categorize the situation as a problem or not.  Try to understand the nature/cause of the problem. Step2: Develop alternative solutions  Try to develop as many alternatives as possible by using such techniques as brainstorming.  Try to be non-judgmental of potential solution at this stage

Prepared by Pheng Khna, Siv VutthyBuild Bright University 24 Step3: Evaluate and select among alternatives  Evaluate feasibility of implementation  Evaluate quality  Evaluate acceptability  Evaluate reversibility  Evaluate costs  Evaluate ethics Step4: Implement and monitor the solution selected  Plan and implement the chosen solution  Be sensitive to the decision that could effects on others  develop follow-up mechanisms

Prepared by Pheng Khna, Siv VutthyBuild Bright University 25 4-Indivual and Group decision making A-Individual decision making B-Group decision making